Question: What processes do valuation ratios follow? Mean-averting process Random walk process Mean-reverting process All of the above are possible. If the stock market is of

Mean-reverting process All of the above are possible. If the stock market

What processes do valuation ratios follow? Mean-averting process Random walk process Mean-reverting process All of the above are possible. If the stock market is of semi-strong form efficient, and the current P-E ratio (Price/earnings) is higher than its long-run average, then what does earnings change in the future? Increase. Decrease. It does not change. I am not sure

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